Marketing Ch. 9

Price is the amount of money charged for a product or service.

Costs that do not vary with production or sales level.

Costs that vary directly with the level of production.

A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged.

Adding a standard markup to the cost of the product.

Uses buyers’ perceptions of value, not the seller’s cost, as the key to pricing.

Set a high price for a new product to “skim” revenues layer by layer from the market.

Set a low initial price in order to “penetrate” the market quickly and deeply.

Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs.

Temporarily pricing products below list price and sometimes even below cost to create buying excitement and urgency.